The Doña Julia Hydroelectric Project involves the construction and operation of a privately-owned
and operated 16 megawatt (MW) hydroelectric plant that is expected to produce an estimated 83 gigawatthours
(GWh) to 87.8 GWh of electricity per year, using the waters from the Puerto Viejo River and Quebradon
Creek. The project will displace electricity and greenhouse gas (GHG) emissions currently produced by
thermal fossil fuel-burning facilities. The project facility became operational in October of 1996.
Electricity generated by the project facility is being sold to the Costa Rican Institute of Electricity
(ICE).

Note: Although the information contained in this report is based on the USIJI project proposal and other
material provided by the project developer, the developer has not yet reviewed this document.

4. Participants:

Name of Organization or Individual

Country

Compañía Hidroeléctrica Doña Julia

Costa Rica

The New World Power Corporation

U.S.A.

Item

Please Complete If Applicable

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Compañía Hidroeléctrica Doña Julia

Name of organization (English)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Project administration, owner and operator of facility

Street

P.O. Box 1420-3000

City

Heredia

State

Post code

Country

Costa Rica

Telephone

Fax

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Corrales

First name, middle name

Carlos

Job title

Executive Director

Direct telephone

506-260-2433

Direct fax

506-237-4583

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Please Complete If Applicable

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

The New World Power Corporation

Name of organization (English)

(Same as above)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Project development, financing

Street

558 Lime Rock Road

City

Lime Rock

State

Connecticut

Post code

06039

Country

U.S.A.

Telephone

Fax

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

The Doña Julia Hydroelectric project involves the construction and operation of a 16
megawatt (MW) hydroelectric plant that is expected to produce an estimated 83 GWh to 87.8 GWh of
electricity per year, using the waters from the Puerto Viejo River and Quebradon Creek. This
hydro-generated power will displace electricity that would have been generated using thermal units
that burn primarily high-sulfur diesel fuel, fuel oil, and IFO 180 fuel. Historically, Costa Rica
has used fossil fuels as a marginal source of power during peak periods, but because of increased
demand, fossil fuel generating plants are operating almost continuously. The project facility
became operational in October 1996. Electricity generated by the facility is being sold to the
Costa Rican Institute of Electricity (ICE).

6. Cost

(a) Explanation of methodology for calculating cost data

Methodology for Calculating Cost Data

The estimated total project cost is $28 million. The full capitalized costs of the project have
been financed with a combination of debt (70%) and equity (30%).

(b) Cost data-Project development

This information is not yet available.

(c) Cost data-Project implementation

This information is not yet available.

7. Monitoring and verification of AIJ project activities and results

Item

Party(ies) that will be monitoring project activities

Compañía Hidroeléctrica Doña Julia

Party(ies) that will be externally verifying project results

This information is not yet available.

Date when the monitoring plan became (or will become) operational (month/year)

First half of 1997

Types of data that will be collected

Total fossil fuel use for the generation of electricity

Description of Monitoring and Verification Activities and Schedule for Implementation

The Costa Rican Ministry of Environment and Energy (MINAE), through its Office of Energy Policy
(DSE), will make available on an annual basis data Costa Rica's total fossil fuel use for the
generation of electricity in the previous year. This information will be published within the first
six months of the year following the year indicated within the fossil fuel consumption data.
Compañía Hidroeléctrica Doña Julia, using conversion tables supplied by
MINAE, or any other source they prefer, will convert the DSE-supplied information to develop a
total and accurate GHG displacement profile for the project lifetime.

Monitoring will take place on a regular and constant basis in accordance with the Project Power
Purchasing Agreement between the Doña Julia Hydroelectric Project and ICE. The development
of offset information by the project will be completed by the month of September, with technical
assistance and data provided by MINAE and ICE.

The participants in this project agree to independent, external verification of the information
presented in the proposal, excluding confidential business information. The participants welcome
inspection by members of the Panel or their designees to verify the accuracy of all data related to
emission reductions and the appropriateness of any procedures or methodologies utilized to
determine such reductions. In addition, the developer has expressed willingness to arrange a
cooperative agreement with an internationally recognized environmental advocacy organization to
verify the procedures and methodologies used. A verification schedule has not yet been developed.

B. Governmental approval

Item

Please check one of the following.

This report is a first report.

or

This report is an
intermediate report.

or

This report is a final report.

Please check one of the following:

This report is a joint
report. Letter(s) of approval of this report from the designated national authority of the other
Party(ies) involved in the activity is(are) attached in Section J, Annex.

or

This report is a separate report.

Additional comments (if any):

C. Compatibility with, and supportiveness of, national economic development and socioeconomic and
environmental priorities and strategies

Compatibility with Economic Development and Socioeconomic and Environmental Priorities

In a letter dated July 26, 1995, René Castro S., Minister of MIRENEM, indicated that the
project would "undoubtedly meet Costa Rica's sustainable development goals by allowing for
the diversification of [Costa Rica's] energy resources and by bringing [Costa Rica] closer to
its goal of satisfying current and future energy needs with a diverse portfolio of clean,
renewable, and environmentally-sound energy sources." The project also helps to achieve Costa
Rica's goal of 100% renewable electricity generation by 2001. This goal is intended to fulfill
the country's commitments under the Framework Convention on Climate Change (FCCC), the
Biodiversity Convention, and Agenda 21.

D. Environmental, social/cultural, and economic impacts of the AIJ project

Non-Greenhouse-Gas Environmental Impacts of the Project

Hydroelectric projects involve major modifications of natural environments that generally have
important side effects, both positive and negative. The negative effects include obstacles to fish
migration, disruption of natural ecosystems by changing river regimes, changes in land use via
construction of roads and transmission lines, sedimentation upstream of the dam, and river bed
erosion downstream. Positive effects include mitigation of floods, creation on new habitats for
some animal species, recreation, and the improvement of transport in rural areas by new roads.

Social/Cultural Impacts of the Project

This information is not yet available.

Economic Impacts of the Project

The project will provide employment during both the construction and operational phases. According
to the developer, the project also will attract foreign capital investment while providing
protection from rising fuel prices, and will help ICE diversify its electricity generation
portfolio.

E. Greenhouse gas impacts of the AIJ project

1. Scenario description

Item

Site Designation

Site number (order of presentation in this report)

1 of 1

Site name/designation

Doña Julia Hydroelectric Project

Project sector

Energy

Reference Scenario

Primary activity(ies)

Electricity generation from fossil fuels

Has the reference scenario changed since the last report? (If yes, explain any changes below.)

Yes

No

This is the first project report.

Description:

Without the project, the percentage of total electricity demand-and associated greenhouse gas (GHG)
emissions-provided by fossil fuels will not be displaced by the additional hydroelectric resource.

Thermal units in Costa Rica were originally designed to meet only peak demand, while hydroelectric
systems were intended to meet base load demand (hydroelectric is preferred because it is half the
cost of thermal generation). However, decreased reliability of hydroelectric plants resulting from
El Niño drought conditions has forced ICE to rely more heavily on thermal units to meet base
load demand. At the same time, energy demand in Costa Rica is growing at a rate of 7 to 9 percent
annually. This rapid growth has put pressure on ICE to continue to expand its current capacity. In
September 1994, the Minister of MIRENEM announced the goal to meet all electricity needs in Costa
Rica with renewable energy sources by 2001. While this goal is intended to fulfill commitments
under the Framework Convention on Climate Change (FCCC), the Biodiversity Convention, and Agenda
21, current energy demand and supply conditions suggest that such a phase-out may be delayed.

In light of ambiguities created by drought and potential conflicts between policy goals and actual
utility expansion plans, the proposal provides a broad picture of future GHG emissions in Costa
Rica by presenting two sets of reference case projections: one developed by ICE and USAID in 1992,
and an "alternative" projection incorporating 1994 fossil fuel consumption data and the
September 1994 Costa Rican government policy goals to phase-out fossil fuels. The
"alternative" reference scenario is presented in this report simply because it leads to a
lower estimate of net project benefits and, hence, is more conservative. The
"alternative" reference scenario is based on the assumption that consumption of diesel
and fuel oil for the electricity generation in Costa Rica will remain at 1994 levels through 1997
and then decline to zero by 2001.

Predicted Project Scenario

Primary activity(ies)

Alternative energy generation (hydroelectric)

Description:

The project will annually displace an estimated 83 to 87.8 GWh of electricity currently produced by
the burning of fossil fuel. (Total output from thermal plants in 1994 was 829.8 GWh.)

The site location is in the northern zone of Costa Rica, a highly precipitous region with annual
rainfall of up to 8000 mm/year. The river flow variation during the course of the year is minimal,
so the plant will be able to effectively manage the water resource year round. During periods when
other hydroelectric facilities are experiencing low water supplies, the Doña Julia Project
will be operational and will effectively displace CO2 emissions that otherwise would
have been generated from burning fossil fuels. However, emissions in the project scenario occur
only until 2001 because all fossil fuel-based generation is expected to be replaced by renewable
energy resources by that year.

Actual Project

Primary activity(ies)

This information is not yet available.

Description:

This information is not yet available.

2. GHG emission/sequestration calculation methodology

GHG Emission/Sequestration Calculation Methodology

Site number

1 of 1

Project sector

Energy

Description of Calculation Methodology for the Reference Scenario

The reference case is based on historic and projected emissions from consumption of diesel and fuel
oil used to power Costa Rica's generating plants. The developer assumes that the consumption of
diesel and fuel oil will remain at 1994 levels through 1997. This is fully consistent with the
MIRENEM Minister's announced goal to phase out fossil fuel by 2001, according to which fossil
fuel consumption is expected to decline beginning in 1998 until it is totally eliminated by 2001.
Based on Costa Rica's fossil fuel phase-out plan, emissions from fossil fuel consumption are
expected to be reduced by approximately 33 percent by 1998, 66 percent by 1999, 99 percent by 2000,
and 100 percent by 2001, relative to 1994 levels.

Because there are no emissions associated with hydroelectric power, emissions in the project
scenario represent Costa Rican fossil fuel electricity generation that is not displaced by the
project's generation. The estimation methodology calculates the displaced generation (i.e., net
project benefits), not the remaining generation.

Net project benefits are the avoided emissions from displaced fossil fuel. Beginning in 1996, net
project benefits in a given year are estimated as the ratio of the plant's projected annual
electricity generation (90 GWh) to total Costa Rican fossil fuel electricity generation in 1994
(829.8 GWh), multiplied by reference case emissions in that year. Because of the anticipated
phase-out of fossil fuel plants, emission reductions decline annually until they reach zero in
2001. By calculating an annual reduction in net project carbon benefits based on the phase-out of
fossil fuels, the project attempts to avoid double-counting emission reductions that may be claimed
by other hydroelectric and wind projects in Costa Rica. (Reductions in the first year are
multiplied by 3/12 to account for the fact that the plant came on-line in October of that year.)
Net project benefits (emission reductions) are calculated as follows:

YearCalculation for Net Project Benefits

1 (1996) (90 GWh/ 829.8 GWh)(861,843 t CO2) * 3/12

2 (1997) (90 GWh/ 829.8 GWh)(861,843 t CO2)

3 (1998) (90 GWh/ 829.8 GWh)(574,942 t CO2)

4 (1999) (90 GWh/ 829.8 GWh)(288,041 t CO2)

5 (2000) (90 GWh/ 829.8 GWh)(1,138 t CO2)

6 (2001) (90 GWh/ 829.8 GWh)(0 t CO2)

Note that emission reductions for Year 1 (1996) have been estimated at 3/12 of 1997 levels to
reflect the date at which the facility came on-line (October 1996). Annual project scenario
emissions are calculated by subtracting annual net project benefits from annual reference scenario
emissions.

Description of Calculation Methodology for the Actual Project

This information is not yet available.

3. GHG emission/sequestration data

(a) Reporting of GHG emissions/sequestration

(b) Additional information on GHG emissions/sequestration

Indirect or Secondary GHG Impacts (Positive and Negative)

The major secondary GHG impact has resulted from clearing approximately two hectares of forest land
at the project site to prepare for construction. However, the effect of such cutting in the overall
carbon accounting is minimal.

Factors That Could Cause the Future Loss or Reversal of GHG Benefits

Given the nature of this project-substitution of fossil fuel generated power with hydroelectric
power-loss or reversal of benefits that have been achieved is not possible. Factors that may cause
a loss of projected emission reductions include natural disasters such as earthquakes, hurricanes,
etc.

Strategy for Reducing the Risk of Future Loss or Reversal of GHG Benefits

The project developers will undertake several steps to minimize potential losses of project
benefits. These include obtaining insurance, assuring regular maintenance, and developing and
implementing inspection protocols.

F. Funding of the AIJ project

1. Identification of funding sources

(a) Funding sources for project development

This information is not yet available.

(b) Funding sources for project implementation

Funding Source

Country ofFunding Source

Amount

($US)

Percentof TotalFunding(%)

Is This Funding Assured? (Y/N)

Total

28,000,000

100

2. Assessment of additional funding needs

Current or Planned Activities to Obtain Additional Funding

This information is not yet available.

G. Contribution to capacity building and technology transfer

Contribution to Capacity Building and Technology Transfer

The project contributes to capacity building by expanding the application of renewable energy
technologies in Costa Rica, and thereby reducing reliance on fossil fuels.